ITC Share Price Target: Brokerage firm Motilal Oswal, on Wednesday (June 3), maintained a neutral stance on Gold Flake manufacturer ITC Limited and cut its price target by over 10 per cent, indicating limited upside for the stock.
The stock, part of the BSE Sensex, closed 1.2 per cent higher at Rs 283.20, gaining Rs 3.50 in the previous session on the BSE. (ITC Share Price)
ITC‘s cigarette business outlook
Motilal Oswal has turned cautious on ITC’s cigarette business, citing a sharp rise in taxation following the revised framework.
The revised taxation structure has led to an estimated 60–65 per cent increase in cigarette taxes for ITC, implying the need for around a 35 per cent hike in MRP.
This, the brokerage notes, represents the steepest tax increase historically and a sharp departure from the relatively stable tax regime seen during 2018-2025.
MOSL believes the current phase can be viewed in two stages. The first is a transitory phase of price adjustment following the tax hike. The second is a tax-neutral phase, where shifts in volumes and a potential gain in the illegal market share will be closely monitored.
The brokerage expects a 10 per cent volume decline in FY27E and flat volumes in FY28E in the cigarette segment. While valuations remain comfortable, MOSL does not see any near-term positive catalyst for the stock.
However, ITC Limited is the market leader in the Indian organised cigarette industry. The company owns brands such as Classic, Gold Flake, Insignia, and many others.
Additionally, the mid-term trend remains weak: over one year, the stock is down 32.47 per cent, and over three years, it is down 32.45 per cent. The longer-term outlook remains positive, with a five-year gain of 43.24 per cent.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
